On Thursday, Steven Levy made clear to Newsweek readers what is already obvious to many here: America's Internet system is falling dangerously behind those in other developed countries. The root of the problem, according to Levy, is the "cozy duopoly" of cable and broadband providers that stifle competition and innovation while driving costs to consumers through the roof.
But that's only the half of it. The near absolute control of phone and cable giants is being bolstered by a Washington establishment that's loath to upset this imbalance of power. The results are now beginning to show in survey after survey that reveal nationwide broadband failures.
Insulating the Duopoly
What's more worrying is the near total abdication by elected and government officials, who are allegedly in place to protect the public interest.
The Bush administration, which has pledged to make broadband cheap and affordable to everyone by 2007, is instead painting the same pretty picture of broadband success.
"I think our policies are a success," FCC chairman Kevin Martin told phone company executives last week.
"We have the most effective multiplatform broadband in the world," the administration's top technologist, John Kneuer, told Web experts in San Francisco last week (to protests from his audience).
Kneuer says the real problem is not bad broadband services or market failure in America, but faulty data -- blaming those who compiled the recent OECD broadband report for getting the facts wrong.
According to Newsweek's Levy, "sniping at the methodology of that report is de rigueur among those who think our national broadband approach is just fine." But the OECD data are not alone. Reports from the International Telecommunications Union, United Nations, Pew Internet & American Life Project and Communications Workers of America demonstrate nationwide problems with access, speed and affordability.
>> You can measure your own connection using CWA's nifty tool.
So what's really happening?
Phone and cable's complete market dominance has translated to anti-competitive, anti-consumer practices that stifle innovation and push our speeds and services generations behind those available in other nations.
"It's not just a matter of national pride," SavetheInternet.com's Ben Scott told Newsweek. "A country that's fully connected has access to tools that let citizens do jobs that we can't do. The cost of falling behind can be hundreds of billions of dollars every year."
A few network giants like AT&T, Verizon and Comcast have staked out the market for themselves. They use aggressive lobbying, phony research and campaign contributions to bend government and distort the markets to their will. This twisting of our elected representatives is a grave problem that transcends any individual industry and weakens democracy at its core.
Sadly, many of those now in power have bought in. By their words and decisions, people like Kneuer and Martin now help phone and cable cement their dominance -- implementing rules that help them further exploit consumers, stifle new innovation and insulate their status quo. America's failing broadband report card is evidence of a larger systems breakdown.
That's the problem. Here's the solution.
To salvage this shipwreck, where cable and phone lines account for more than 95 percent of residential broadband access, we need to explore a policy that drove success in other countries -- open access.
We have already recommended an open access solution for the emerging wireless platform. This would yield dozens of new and competing providers and result in lower prices, faster service, and a faster pace of innovation. We need to weigh open access benefits for wireline Internet as well.
Without Net Neutrality and open access, you will see a duopoly market that harms innovation in the short- and long-term, as we lose edge-of-the-network innovation and application diversity.
Smart investors recognize that broadband enables high-growth, and that these networks become more valuable the more "apps" they have. Killing Net Neutrality and locking in the duopoly may mean short-term gains for the major telcos, but in the long-run it devalues their network by stunting the growth of new businesses at the application level.
If they're truly intent upon serving the public, Washington decision-makers need to foster new entrants and create an Internet access marketplace with real choice, speed and competitive pricing. Successful formulas used by other countries have lit a path to a better Internet for us at home.
Open and neutral access is the answer.